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Jan. 2, 2020, 10:09 a.m. EST

European stocks enjoy new year rally on trade deal optimism and Chinese stimulus

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By Callum Keown


Getty Images
Chinese stimulus ensured new year gains for European stocks

European stocks started the new year with a rally on Thursday as trade optimism continued and China’s central bank gave markets a boost.

The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.42%   jumped 1%, along with the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.47%   , while the French CAC /zigman2/quotes/210597958/delayed FR:PX1 +0.33%   climbed 1.4% in early trading. The German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.27%   gained 1.1% and Italy’s FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 +1.75%   rose 1.4% on the first day’s trading of 2020.

U.S. stocks followed higher, with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +2.24% , the S&P 500 /zigman2/quotes/210599714/realtime SPX +2.28%  and the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +1.72%   all hitting fresh record highs shortly after the open.

What’s moving the markets?

After a strong end to 2019 followed by the New Year’s holiday, renewed optimism over a U.S.-China trade deal helped propel European stocks higher on the first day of 2020 trading. President Trump also plans to visit Beijing to begin talks on a ‘phase 2’ deal, while ‘phase 1’ will be signed in a White House ceremony on Jan.15.

China’s central bank added to the feel-good factor, announcing on Wednesday it would cut the amount of money banks will be required to have on hand from Monday - in a bid to boost the slowing economy. The reserve requirement ratio will be cut by 50 basis points, which is expected to release about 800 billion yuan ($114.6 billion) into the economy.

Which stocks are active?

Tullow Oil /zigman2/quotes/205079109/delayed UK:TLW +12.69%   fell 8% after the company said it found four metres of net oil pay at its offshore Guyana well, which was less than expected. The oil and gas company said the Carapa-1 exploration well, drilled to a depth of 3,290 metres in 68 metres of water, would now be plugged and abandoned.

Airbus /zigman2/quotes/208224336/delayed FR:AIR -3.70%   shares rose 2.6% after reports the European plane maker beat its own delivery forecast for 2019 to topple U.S. rival Boeing /zigman2/quotes/208579720/composite BA -5.68%   as the world’s largest plane maker. Airbus delivered 863 jets last year, Reuters reported, 3 higher than its guidance.

Mining stocks enjoyed solid gains following China’s RRR cut announcement. The policy news from the world’s largest metals consumer, sent Glencore /zigman2/quotes/201400686/delayed UK:GLEN +6.48%   shares up 2.8% and Antofagasta /zigman2/quotes/200173667/delayed UK:ANTO +1.99%   3.1% higher.

/zigman2/quotes/210599654/delayed
XX : STOXX
312.08
+1.31 +0.42%
Volume: 0.00
April 2, 2020 5:50p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
5,480.22
+25.65 +0.47%
Volume: 1.53M
April 2, 2020 5:00p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
4,220.96
+13.72 +0.33%
Volume: 135,203
April 2, 2020 6:05p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
9,570.82
+26.07 +0.27%
Volume: 144,225
April 2, 2020 6:30p
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/zigman2/quotes/210598024/delayed
IT : Borsa Italiana
16,834.03
+289.06 +1.75%
Volume: 0.00
April 2, 2020 5:35p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
21,413.44
+469.93 +2.24%
Volume: 534.67M
April 2, 2020 5:11p
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/zigman2/quotes/210599714/realtime
US : S&P US
2,526.90
+56.40 +2.28%
Volume: 3.87B
April 2, 2020 5:11p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
7,487.31
+126.73 +1.72%
Volume: 3.17M
April 2, 2020 5:16p
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/zigman2/quotes/205079109/delayed
UK : U.K.: London
11.68 p
+1.32 +12.69%
Volume: 38.07M
April 2, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£146.00 million
Rev. per Employee
N/A
loading...
/zigman2/quotes/208224336/delayed
FR : France: Euronext Paris
50.27
-1.93 -3.70%
Volume: 4.73M
April 2, 2020 5:38p
P/E Ratio
N/A
Dividend Yield
3.28%
Market Cap
€40.84 billion
Rev. per Employee
€476,596
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/zigman2/quotes/208579720/composite
US : U.S.: NYSE
$ 123.27
-7.43 -5.68%
Volume: 42.37M
April 2, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
6.67%
Market Cap
$73.74 billion
Rev. per Employee
$660,961
loading...
/zigman2/quotes/201400686/delayed
UK : U.K.: London
126.88 p
+7.72 +6.48%
Volume: 45.47M
April 2, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£15.72 billion
Rev. per Employee
£1.04M
loading...
/zigman2/quotes/200173667/delayed
UK : U.K.: London
758.60 p
+14.80 +1.99%
Volume: 2.52M
April 2, 2020 4:35p
P/E Ratio
19.08
Dividend Yield
3.61%
Market Cap
£7.33 billion
Rev. per Employee
N/A
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Callum Keown is a Barron's Group reporter for the Europe, Middle East and Africa region. He writes for MarketWatch, Barron’s, Penta and Financial News.

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